Category: Press Release

NJPP Charts a Course for Reforming State Income Tax

Posted on by NJPP Staff

By increasing income tax rates on New Jersey’s wealthiest households, the state could raise over $1 billion a year to help build strong communities and invest in working families across the state, according to a report released today by New Jersey Policy Perspective (NJPP). The report finds that New Jersey’s personal income tax has not kept up with the times, depriving New Jersey of resources needed to build widely shared prosperity.

Specifically, the NJPP report proposes adding four brackets to the state’s income tax and increasing rates on the state’s wealthiest 5 percent of households. The proposal is modeled on successful reforms put in place by California in 2012.

“Like California six years ago, New Jersey faces tremendous financial challenges. Our budget is stretched beyond capacity, we have chronically underfunded services that are critical to families in need, and we’ve failed to make the kinds of sound public investments in infrastructure and education that can ensure our economy is strong going into the third decade of the 21st century and beyond,” said Sheila Reynertson, NJPP senior policy analyst and author of the report. “This proposal alone will not solve the state’s fiscal crisis, but it is a substantial yet sensible step in the right direction.”

NJPP’s proposal would also combat growing inequality in New Jersey, where too few families prosper while too many families struggle to get by every day.

Today, the most well-off New Jerseyans hold a greater share of the state’s income than they have in nearly a century, thanks to decades of unequal economic growth, creating an off-balance economy in which many middle- and lower-income New Jerseyans face barriers to economic opportunity. In fact, New Jersey’s top 5 percent of households now have average incomes that are 15.6 times larger than the bottom 20 percent of households, ranking 7th in the country for income inequality. Recent state tax policy changes have exacerbated this trend, making it harder for New Jersey to foster the kind of investments that expand the middle class and help narrow that gap.

“Those at the very top, who have greatly prospered in the past decade, have a responsibility to pay their fair share and ensure our state and our society has a strong foundation for the future,” added Reynertson.

The report is the third of a series of NJPP reports digging into the details of state tax reforms that can help end New Jersey’s fiscal crisis while promoting shared prosperity and furthering economic justice in the Garden State, and it comes as the major-party candidates for governor continue to have a spirited public debate over taxes.

Earlier reports in the series:

Trump Budget Would Shift Food Assistance Costs to New Jersey

Posted on by NJPP Staff

New Jersey would have to come up with about $300 million a year to cover the lost federal funding for food stamps, costing the Garden State an estimated $2.1 billion over 10 years, under President Trump’s budget proposal, according to a report released today.

The budget proposal would shift a significant share of the cost of paying for food assistance to states and allow states to – for the first time ­– cut benefits, according to the report from the Washington, D.C.-based Center on Budget and Policy Priorities (CBPP). The proposal seriously threatens the success the Supplemental Nutrition and Assistance Program’s (SNAP, previously known as Food Stamps) has had in reducing severe hunger and malnutrition.

“This proposal threatens to dramatically increase the number of New Jerseyans at risk of going hungry,” said Adele LaTourette, director of the New Jersey Anti-Hunger Coalition. “In a nation of this much wealth, that would be unconscionable. New Jersey’s Congressional delegation must reject any proposal that puts New Jersey families, kids, seniors, and people with disabilities at risk of not getting enough to eat.”

Historically, SNAP benefits have been financed exclusively with federal funds to ensure that regional disparities in hunger, poverty and resources are properly addressed. This has helped ensure that low-income households have access to adequate food no matter where they might live.

The President’s budget would end this longstanding and successful approach by forcing states to cover 10 percent of SNAP benefit costs beginning in 2020, and increasing that share to 25 percent by 2023. The proposal would cut federal SNAP funding by $116 billion over a decade.

“New Jersey is in dire fiscal condition, and its safety net is already in tatters. It’d be unable to absorb such significant cost shifts without cutting SNAP benefits and taking other steps that could increase hunger and hardship,” said Jon Whiten, Vice President of New Jersey Policy Perspective. “Budgets are moral documents that reflect our priorities as a society. We need our members of Congress to stand up and say: Increased hunger and poverty go against my values, and I won’t support a federal spending plan that guts food assistance.”

And, these added costs would come on top hundreds of billions of dollars in additional costs shifts to states both in the President’s budget. In total, the President’s budget would shift about $453 billion annually to states and localities once the cuts were fully implemented in 2027.

At the same time, the President is proposing massive tax cuts largely for the wealthy and corporations that would likely cost several trillion dollars over the coming decade.

Under the proposal, an estimated 51,000 New Jersey residents would lose even the most meager food stamp benefit, according to CBPP statistics.

In New Jersey alone, more than 800,000 people rely on this critical nutrition assistance. Most work – often juggling multiple jobs – and still can’t make ends meet because of low-wage jobs that offer few, if any, benefits.

The average SNAP benefit in New Jersey is a meager $142 per household. Research shows that every SNAP dollar is spent quickly and directly impacts the local economy by a multiplier of almost 2 to 1.

The New Jersey Anti-Hunger Coalition is traveling to Washington, D.C., this week to meet with the state’s Congressional delegation and educate them on how harmful this proposed cut would be.

“We are hopeful that our representatives will protect New Jersey’s most vulnerable residents and take steps to protect this vital piece of our safety net,” LaTourette said.

Dismantling Medicaid Would Harm New Jersey’s Women

Posted on by NJPP Staff

The health bill passed by the House, in particular its proposal to cap and cut Medicaid and end the program’s expansion, would have devastating consequences for the nearly 1 million women in New Jersey who rely on the program, according to a new report from the Washington, DC-based Center on Budget and Policy Priorities.

Women would bear an outsized share of the burden of these cuts because they not only make up a majority (54 percent) of Garden State Medicaid beneficiaries, but are also the primary users of family planning and maternity benefits and are much more likely to use Medicaid’s long-term services.

With the debate over health care shifting to the Senate, Senators Booker and Menendez can prevent these harmful cuts and other changes from ultimately becoming law.

“The Senate must protect New Jersey women – and all New Jerseyans – by rejecting any bill that causes people to lose coverage, caps or cuts Medicaid, ends the Medicaid expansion or takes away critical protections,” said Jon Whiten, Vice President of New Jersey Policy Perspective. “Failing to meet any of these standards would hurt New Jersey women and families.”

The House-passed bill, which President Trump supports, would slash more than $800 billion from Medicaid over ten years by effectively eliminating the Affordable Care Act’s (ACA) expansion of Medicaid to low-income adults and imposing a “per capita cap” on the program. The per capita cap would break the federal government’s decades-long guarantee to pay a fixed share of states’ Medicaid costs.

These cuts would put at risk the critical support Medicaid gives to women throughout their lives:

  • Nearly all women use some form of family planning during their reproductive years, and Medicaid finances 75 percent of all publicly-funded family planning services. The House-passed bill also specifically targets access to women’s health care services by barring states from reimbursing Planned Parenthood for its preventive health and family planning services for women and men enrolled in Medicaid.
  • Medicaid provides health care for nearly half of all pregnant women, supporting them through their pregnancies and ensuring that their babies have a healthy start. In fact, Medicaid financed 28 percent of births in New Jersey in 2010.
  • Because women live longer than men, women are much more likely to use Medicaid’s long-term services and supports as they age. The program also plays an especially critical role for older women of color who are also enrolled in Medicare, covering nearly 40% of Latina and African American women over 65.

“Medicaid plays a vital role in helping meet the unique health care needs of women, who are the primary users of family planning and maternity care and more likely to use long-term services. Under the House bill, many low-income women would struggle to afford the services they and their families need,” said Ray Castro, Director of Health Policy at New Jersey Policy Perspective. “Our Senators need to protect Medicaid – not cut it.”

The House-passed bill also includes several provisions that are especially harmful to women with private insurance. For example, it would allow states to opt out of the ACA’s Essential Health Benefits (EHB) standard, effectively allowing insurers to charge women much more than men by leaving many women without affordable access – or any access – to maternity coverage. It also would give states the option of allowing insurers to charge far higher premiums to people who are pregnant, have had a c-section, or were treated for injuries resulting from domestic violence.

Dismantling Medicaid Would Harm New Jersey’s Women

Posted on by NJPP Staff

The health bill passed by the House, in particular its proposal to cap and cut Medicaid and end the program’s expansion, would have devastating consequences for the nearly 1 million women in New Jersey who rely on the program, according to a new report from the Washington, DC-based Center on Budget and Policy Priorities.

Women would bear an outsized share of the burden of these cuts because they not only make up a majority (54 percent) of Garden State Medicaid beneficiaries, but are also the primary users of family planning and maternity benefits and are much more likely to use Medicaid’s long-term services.

With the debate over health care shifting to the Senate, Senators Booker and Menendez can prevent these harmful cuts and other changes from ultimately becoming law.

“The Senate must protect New Jersey women – and all New Jerseyans – by rejecting any bill that causes people to lose coverage, caps or cuts Medicaid, ends the Medicaid expansion or takes away critical protections,” said Jon Whiten, Vice President of New Jersey Policy Perspective. “Failing to meet any of these standards would hurt New Jersey women and families.”

The House-passed bill, which President Trump supports, would slash more than $800 billion from Medicaid over ten years by effectively eliminating the Affordable Care Act’s (ACA) expansion of Medicaid to low-income adults and imposing a “per capita cap” on the program. The per capita cap would break the federal government’s decades-long guarantee to pay a fixed share of states’ Medicaid costs.

These cuts would put at risk the critical support Medicaid gives to women throughout their lives:

  • Nearly all women use some form of family planning during their reproductive years, and Medicaid finances 75 percent of all publicly-funded family planning services. The House-passed bill also specifically targets access to women’s health care services by barring states from reimbursing Planned Parenthood for its preventive health and family planning services for women and men enrolled in Medicaid.
  • Medicaid provides health care for nearly half of all pregnant women, supporting them through their pregnancies and ensuring that their babies have a healthy start. In fact, Medicaid financed 28 percent of births in New Jersey in 2010.
  • Because women live longer than men, women are much more likely to use Medicaid’s long-term services and supports as they age. The program also plays an especially critical role for older women of color who are also enrolled in Medicare, covering nearly 40% of Latina and African American women over 65.

“Medicaid plays a vital role in helping meet the unique health care needs of women, who are the primary users of family planning and maternity care and more likely to use long-term services. Under the House bill, many low-income women would struggle to afford the services they and their families need,” said Ray Castro, Director of Health Policy at New Jersey Policy Perspective. “Our Senators need to protect Medicaid – not cut it.”

The House-passed bill also includes several provisions that are especially harmful to women with private insurance. For example, it would allow states to opt out of the ACA’s Essential Health Benefits (EHB) standard, effectively allowing insurers to charge women much more than men by leaving many women without affordable access – or any access – to maternity coverage. It also would give states the option of allowing insurers to charge far higher premiums to people who are pregnant, have had a c-section, or were treated for injuries resulting from domestic violence.

Booker, Pallone, Norcross & NJPP: Raise the Minimum Wage

Posted on by NJPP Staff

Gradually increasing the minimum wage to $15 an hour would provide a huge boost to the economic security of over 1 million New Jersey workers and a jolt to the state’s economy, Congressional leaders and policy experts told reporters today.

“The minimum wage is failing to provide basic economic security and a reasonable standard of living for millions of workers across the country,” said Sen. Cory Booker. “Thanks to the great work by NJPP, we know that raising the minimum wage to $15 per hour would boost the pay of 28 percent of New Jersey’s workforce – that’s 1.2 million New Jerseyans. Raising the minimum wage is not only an important step toward ensuring that hardworking Americans are more fairly compensated for their work, but it’s also smart economic policy.”

By lifting the federal wage floor to $15 by 2024, the “Raise the Wage 2017 Act” would directly boost the take-home pay of 688,000 New Jersey workers, according to a new report by New Jersey Policy Perspective and the Economic Policy Institute. Another 481,000 would be indirectly affected; these are workers who earn as much as 15 percent more than the new minimum wage and would likely see their pay increase as well. Nearly all those who would benefit – 91 percent – are adults, and a majority – 61 percent – work full time.

“It is unacceptable that Americans can work 40 hours a week and live in poverty. For millions of families the minimum wage is not enough to pay the bills, put food on the table, and support their families,” said Rep. Frank Pallone. “By passing the Raise the Wage Act, we can bring about a pay raise for tens of millions of workers, raise living standards, lift millions of Americans out of poverty, and provide a much-needed boost to our economy.”

“No American who works full-time should live in poverty. But that’s exactly what’s happening all around us,” added Rep. Donald Norcross. “Working families are struggling to pay their bills and it’s well-past time we give these Americans a fighting chance by raising the federal minimum wage. The system now hurts our economy, hurts taxpayers and is morally offensive. When people finally receive $15 an hour, they’ll spend more, become less reliant on government assistance and give our economy a needed boost.”

New Jersey’s minimum wage is slightly higher than the federal level, at $8.44 an hour. But that’s still far less than what it takes to get by in the state today. In fact, the United Way of Northern New Jersey has found that, in 2014, the average “survival budget” in the Garden State required a single adult working full-time to earn $12.15 an hour. A “sustainability budget,” which includes additional expenses like modest savings and money for a cell phone, required an average statewide wage of $18.94 an hour in 2014 for a single adult working full-time. A bill to increase New Jersey’s minimum wage to $15 an hour by 2021 was passed by the legislature in 2016 but vetoed by Gov. Christie.

“Raising the federal minimum wage is by all means a sound idea to help families across America better make ends meet and begin a pathway into the middle class,” said Jon Whiten, Vice President of New Jersey Policy Perspective. “But is especially necessary in New Jersey, where the wages are still low but the costs of living – particularly housing – are very high. Garden State workers need a raise, and they need one now.”

How to Improve Paid Family Leave in New Jersey

Posted on by NJPP Staff

FLI by year percentage bonding-01New Jersey’s trailblazing paid family leave policy is falling short of its potential, with serious repercussions for New Jersey’s working families and the state’s economy, advocates said on a press conference call today.

While the state’s Family Leave Insurance (FLI) program – signed into law in 2008 – has been a clear success, having replaced over half a billion dollars in lost wages for hundreds of thousands of New Jerseyans who needed to take time off to be with a new child or sick family member, it could help even more New Jersey families with a few modest tweaks, according to a new report by New Jersey Policy Perspective (NJPP) that was released and discussed on the call.

“New Jersey led the way when we became the second state to adopt a paid family leave program. Since it began in 2009, the NJ Family Leave Insurance program has helped hundreds of thousands of New Jerseyans to be there for loved ones when they’ve needed them most,” said Dena Mottola Jaborska, Director of Advocacy and Organizing at New Jersey Citizen Action. “But we can do better. With a few changes we can ensure the program is accessible for all New Jerseyans when they need time to care for their loved ones.”

NJPP’s chief recommendation is to improve the wage replacement policy to ensure more New Jerseyans can afford to take leave when they need to, by increasing the current two-thirds wage replacement to make leave more affordable for low-income workers while raising the very low cap on earnings to enable more middle- and higher-paid workers to afford leave. But the report includes a slate of other recommendations as well: include job protections for those taking leave; expand outreach efforts to ensure greater awareness of the program; allow workers to take 12 weeks of paid leave; and expand the definition of family that is eligible for leave.

“Paid family leave is good for families, good for businesses and good for the economy,” said Jon Whiten, Vice President of NJPP. “It’s great that New Jersey has paid leave, but just having it is not enough: we need to ensure that our policy is as effective as possible. The good news is that there are some relatively simple tweaks that could go a long way to making paid family leave an even bigger asset to New Jersey.”

The core problem is that New Jersey’s paid family leave policy design undermines the intention of the program, since just two-thirds of a workers’ weekly salary is replaced – up to a meager cap of $633 per week. This is inadequate for low-income families as well as higher-paid middle-class families.

Take a low-paid worker making $600 a week, or about $15 an hour if they are working 40 hours a week. On leave, the two-thirds replacement rate would provide that worker just $400 a week, the equivalent to $10 an hour – a decrease that an already-struggling family could ill afford.

And even for higher-paid families, a few weeks of missing pay can cause financial instability. A New Jersey family with one adult and a child needs around $1,000 per week (about $52,000 a year) just to get by. Today, a worker earning that much would lose $367 a week by taking paid family leave – a full 37 percent of his or her pay.

Inadequate wage replacement policy is a major factor that keeps too many New Jersey workers from taking leave. Only an estimated 12 percent of eligible new parents are taking paid family leave (14 percent in the most recent year for which data is available), the NJPP report finds. In contrast, an estimated 17 percent of eligible new parents in California have used that state’s paid leave program since inception (and 20 percent in the most recent year for which data is available).

“Paid family leave is an important asset to New Jersey’s economy and working families – but it is falling short. Many families simply cannot afford to go on leave because of New Jersey’s poverty-level replacement rates,” said Amy Dunford, the author of the report and a former Kathleen Crotty Fellow at NJPP. “New Jersey should strengthen its wage replacement rates to boost the usage of the program, allowing many more families to receive the benefits of leave and creating a stronger and more competitive economy.”

While the bulk of paid leave in New Jersey (81 percent) is taken by new parents, paid leave for caregivers is a crucial part of the program – and of vital importance to New Jersey families as the population ages, more people of all ages live with disabilities and the complexity of care tasks increases.

“New Jersey’s 1.1 million family caregivers make it possible for older New Jerseyans and other loved ones to live independently at home—where they want to be – yet too many working caregivers face financial difficulties or risk losing their jobs if they must take time off to address family needs,” said Evelyn Liebman, Associate Director of AARP-New Jersey. “And improving New Jersey’s Family Leave Insurance program makes fiscal sense. New Jersey’s family caregivers perform unpaid care valued at about $13.6 billion annually to help their loved ones stay at home, the value of which is significantly greater than the annual cost of Medicaid for institutional stays. Without family-provided help, the economic cost to the state’s health and long term services and supports systems would skyrocket.”

Since men and women are equally eligible to apply for family leave insurance, the policy should help reduce disparities between mothers and fathers on salaries, workplace promotions and childcare duties. But that has not been the case.

New Jersey women are using paid family leave far more than men – comprising 86 percent of all eligible claims. When it comes to leave to bond with a new child – which makes up the overwhelming majority of paid leave taken in New Jersey – men comprise an even smaller share, at just 12 percent. In other states with paid leave, this share is much higher: men make up 33 percent of bonding claims in Rhode Island and 29 percent in California.

While this can be attributed to many factors, including cultural norms, lack of awareness and lack of job protection, New Jersey’s inadequate wage replacements clearly play a role: With men earning $12,000 a year more on average than women, many men stand to lose larger chunks of their take-home pay by taking paid family leave.

“Research shows that New Jersey’s Family Leave Insurance Program has helped many workers afford to take time off to care for family, but it has untapped potential to help many more,” said Karen White, Director of the Working Families Program at the Rutgers Center for Women and Work. “NJPP’s report shows how we can increase access to this important asset.”

The costs to make the improvements outlined in NJPP’s report would be modest and paid for entirely by workers. If lawmakers adopted all the changes in the report, paid leave usage soared and workers took every day of available leave – a highly unlikely combination – New Jersey workers would still be paying significantly less each year to the program than workers in California and Rhode Island.

Undocumented Residents Pay $587 Million a Year in NJ Taxes

Posted on by NJPP Staff

New Jersey’s undocumented immigrants contribute $587 million in state and local taxes, the sixth highest level of all the states. And those contributions would increase by $73 million – the eighth most of all states – under comprehensive immigration reform. These are the key Garden State findings in a new 50-state study released today by the Institute on Taxation and Economic Policy.

“Undocumented New Jerseyans are entrepreneurs, homeowners and vital contributors to the state’s economy and communities,” said Erika Nava, Policy Analyst at New Jersey Policy Perspective. “Facts matter – and this report is yet more proof that undocumented immigrants are an asset to our state and our nation.”

Other key findings of the report:

  • Undocumented residents across the country pay a total of $11.7 billion in state and local taxes.
  • New Jersey’s undocumented immigrants pay a higher effective state/local tax rate (7.7 percent) than the state’s top 1 percent of households (those with incomes over $758,000 a year, who pay an effective state/local tax rate of 7.1 percent).
  • New Jersey’s undocumented immigrants pay $49 million in personal income taxes; $272 million in property taxes and $266 million in sales and excise taxes.
  • After comprehensive immigration reform, the personal income tax contributions of New Jersey’s currently undocumented residents would increase by 40 percent (or $20 million); their property tax contributions would rise by 10 percent (or $27 million) and their sales/excise tax contributions would increase by 10 percent (or $27 million).

“Just as the horrendous impact of breaking up families under a mass deportation policy should not be ignored, nor should policymakers overlook the significant contributions undocumented immigrants make to our state and local revenues and the economy,” said Meg Wiehe, ITEP Director of Programs at the Institute on Taxation and Economic Policy. “Keep in mind most state and local taxes are collected from people regardless of immigration status. Undocumented immigrants, like everyone else, pay sales and excise taxes when they purchase goods and services. They pay property taxes directly on their homes or indirectly as renters. And many undocumented immigrants also pay state income taxes.”

Repealing the Medicaid Expansion: The Wrong Prescription for New Jersey

Posted on by NJPP Staff

President-elect Donald Trump’s proposal to repeal the Medicaid expansion as part of rolling back most of the Affordable Care Act (ACA) would harm New Jersey far more than most other states, Congressman Frank Pallone, health care policy experts and advocates representing Garden State consumers and hospitals said on a press conference call today.

“I want to thank New Jersey Policy Perspective for sounding the alarm and providing crucial insight as to the harm repealing Medicaid expansion would cause in New Jersey. More than half a million adults in New Jersey would lose their healthcare if the Medicaid expansion is ended,” said Congressman Pallone. “In just the district I represent, almost 40,000 adults would lose Medicaid coverage. Two-thirds of those people are low-wage workers, or are in a household in which an adult works. These individuals would have no other affordable healthcare option. As Ranking Member on the House Energy and Commerce Committee, I will work tirelessly to protect the Medicaid expansion and so many other important provisions of the Affordable Care Act that are under threat by the President-elect.”

The press call coincided with the release of a new report from New Jersey Policy Perspective, which lays out in stunning detail the damage such a repeal would have on the state.

The report finds that repealing the Medicaid expansion would:

  • Cause over a half million low-income residents to lose health coverage

  • Cost the state about $3 billion a year in federal funds

  • Reverse the historic progress New Jersey has made in reducing the number of residents without insurance

  • Deepen the state’s severe financial and budget crisis

  • Harm New Jerseyans across the state, as well as hospitals and other health care providers

“Repealing the Medicaid expansion would cause major harm for many struggling working New Jerseyans who are just trying to get by in a state with one of the highest costs of living in the nation,” said Ray Castro, NJPP Senior Policy Analyst and author of the report. “Most of these residents are working but they’re paid so poorly that, without Medicaid, they simply would have nowhere to turn for their basic health care needs.”

Advocates representing consumers and hospitals joined the call to warn of the negative consequences from repealing the expansion.

“Repealing the Affordable Care Act without an appropriate replacement would take us back to a place where hundreds of thousands of uninsured New Jerseyans receive care primarily in emergency rooms and charity care services top $1 billion annually,” said Betsy Ryan, President and CEO at the New Jersey Hospital Association. “The financial burden on hospitals would be tremendous, and we would all feel the impact through increased healthcare costs and reduced access to care.”

Undocumented Workers’ Big Role in New Jersey’s Economy

Posted on by NJPP Staff

New Jersey’s economy would suffer a substantial blow if all of the United States’ 11.3 million undocumented immigrants – more than 7 million of whom are working – were removed from the country, according to a Fast Facts analysis released today by New Jersey Policy Perspective (NJPP).

In fact, the loss to New Jersey’s Gross Domestic Product of 4.9 percent is the largest loss of any of the 50 states, topping immigrant-heavy states like California (4.7 percent loss), Texas (3.9 percent loss) and New York (3 percent loss).

New Jersey is in no financial position to welcome a shift in federal policies and actions that would accelerate the deportation of our working undocumented residents,” said Gordon MacInnes, President of NJPP. “In fact, no state would suffer more from such an abrupt change in federal action.”

The forced removal of these striving immigrants would cause New Jersey to lose $25.9 billion in annual economic activity. While this is not the largest dollar loss of any state (California tops the list at $103 billion), it is the largest when taken in context of the size of a state’s economy.

“This data shows what we have been saying all along: the myth that immigrants are taking from and rather than contributing to our economy is not only wrong but problematic,” said Johanna Calle, Program Coordinator of the New Jersey Alliance for Immigrant Justice. “New Jersey is an immigrant state, like California, Texas, and New York. We should embrace this fact and push forward with policies that promote inclusion and acceptance of our immigrant residents.”

Dear Congress: It’s Time to Expand the EITC

Posted on by NJPP Staff

A few weeks ago, New Jersey’s Earned Income Tax Credit (EITC) was increased for the second time in two years. The state credit, which piggybacks on the federal EITC, will now be 35 percent for 2016 taxes, up from 20 percent as recently as 2014.

While these increases to New Jersey’s EITC are crucial and improve the lives of working families across New Jersey, far too many New Jersey workers receive very small tax credits – or none at all – because they aren’t raising children. Today, some of New Jersey’s leading anti-poverty legislators and advocates came together to call on Congress to fix this problem in the coming months and ensure that working adults without children are no longer the lone group of Americans that the federal tax code taxes into – or deeper into – poverty. 

“This tax credit provides substantial relief to working families across New Jersey, and is one of the sharpest tools to fight poverty. That’s why I have made expanding the state EITC a centerpiece of my efforts to rebuild our middle class and combat poverty,” said Assembly Speaker Vincent Prieto, the prime sponsor of Assembly legislation to increase New Jersey’s EITC. “But as it stands, the EITC fails to deliver its well-documented benefits to a large and diverse group of New Jersey’s workers: adults – particularly young adults – who aren’t raising children. Expanding the EITC for these workers would provide an essential complement to our recent increase in the state EITC, and Congress ought to make this a top priority in the coming months.”

Senator Shirley Turner, the prime sponsor of Senate legislation to increase the New Jersey EITC, echoed the Assembly Speaker’s call to action.

“It’s crucially important that lawmakers boost the incomes of low-wage workers in high-cost New Jersey, which is why I’ve been such a strong supporter of increasing the state Earned Income Tax Credit,” said Senator Shirley Turner. “But state legislators can’t do it alone; we need the full partnership of Congress to expand the EITC so it no longer taxes adult workers who aren’t raising kids into poverty. We hope New Jersey’s Congressional delegation stands strong for these low-wage workers.”

Today’s press call accompanied a new report from New Jersey Policy Perspective (NJPP), which examines the impact EITC expansion would have on New Jersey’s low-wage workers. The report finds that between 343,000 and 504,000 Garden State workers would benefit from the three main federal proposals to expand the EITC – the strongest of which was proposed by New Jersey’s own Senator Cory Booker. The proposals to expand the EITC would reward the hard work of a broad swath of New Jerseyans – young and older, male and female, and across all races – who do important low-paid jobs in hospitals, schools, office buildings, and construction sites.

“Expanding the Earned Income Tax Credit is smart policy that has bipartisan support across the country, and its improvements are long overdue,” said Brandon McKoy, Policy Analyst at New Jersey Policy Perspective and author of the new report.“Allowing young workers not raising children to benefit more from the credit will put more money back in their pockets. In turn, they will spend that money and help stimulate New Jersey’s economy. Lawmakers in Washington should make this a priority now.”

Expanding the EITC for low-income workers without dependent children would raise their incomes and help offset the impact of other taxes they pay. Currently, the maximum EITC available (federal and state combined) to a New Jersey worker not raising kids is $683. Under the EITC expansion proposals, that could rise to between $1,350 and $2,025, depending on the plan.  

In a high-cost state like New Jersey, which leads the nation in the share of 18 to 34 year olds living at home, this income boost would help promote greater economic mobility for young workers, which in turn would help boost the economy.

“Every year New Jersey Citizen Action provides free tax preparation for over 5000 New Jerseyans at our tax preparation center in Newark. Many of these workers earn thousands of dollars in refunds because of the Earned Income Tax Credit, one of the best anti-poverty programs our country and our state has to offer,” said Ann Vardeman, Program Director at New Jersey Citizen Action. “However too many young workers and workers without children are being left behind from the economic benefits of the EITC. It’s time for Congress to include all low-income workers in the economic boost the EITC can provide.”

And the benefits of extending the EITC to childless workers go beyond helping low-income individuals and families afford more of their day-to-day needs. Decades of research on the EITC has shown improvements in health outcomes and increased employment for EITC recipients, and recent studies indicate that this expansion for workers not raising children could reduce crime and increase public safety.

“Far too many workers in New Jersey are facing economic hardship and unable to make basic ends meet without turning to increasingly strained private charities,” said Renee Koubiadis, Executive Director of the Anti-Poverty Network of New Jersey. “The EITC has been one of the most successful anti-poverty programs in our country’s history, but more needs to be done to make sure people who need it most can benefit from the EITC.”

Today marks the kickoff of a New Jersey campaign to raise awareness about the need to expand the EITC at the federal level. The campaign, led by New Jersey Policy Perspective with key partners like New Jersey Citizen Action and the Anti-Poverty Network of New Jersey, is focused on ensuring that New Jersey’s Congressional delegation includes this crucial expansion as part of the important work done in D.C. early next year. But it also includes a path forward for state policymakers, should Congress fail to act.

“Increasing the earned income tax credit for working people without children helps to address a clear moral, as well as financial, problem we face today in New Jersey: our tax code still does not provide those at the very bottom of the economic ladder as fair a chance at moving up as it does to those already nearer the top,” said Rob Gregson, Executive Director of the Unitarian Universalist Legislative Ministry of New Jersey. “As people of faith, we have a special obligation to advocate for all those who struggle against the odds and to stand up for justice–which is why the Unitarian Universalist Legislative Ministry of New Jersey and our associated congregations fully support this targeted increase in the Earned Income Tax Credit.”

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